Do family-friendly policies like childcare subsidies and job sharing increase productivity and profits? Or are they luxuries that hurt the bottom line?

A paper (pdf) by Nick Bloom, Tobias Kretschmer, and John van Reenen says the truth lies somewhere in the middle. In their study of more than 450 manufacturing firms in the US and Europe, they found that family-friendly workplace practices (FFWP) were associated with more productive companies — but that was because the companies were well-run in the first place. In addition, they found that “firms with a higher proportion of female managers and more skilled workers tend to implement more FFWP.” These initiatives might not not earn money, but they pay for themselves, and can produce less-tangible benefits as well — such as attracting women to and retaining them in management positions.

So in the end, family-friendly workplaces don’t make a company great. But great companies tend to make workplaces family-friendly.

13 Responses to “The (slightly) surprising truth about family-friendly workplaces”

  1. Amber Shah says:

    “So in the end, family-friendly workplaces don’t make a company great. But great companies tend to make workplaces family-friendly.”

    Am I the only one who reads this as a chicken-and-egg conclusion? Someone clearly got the ball rolling, and maybe that kind of take-initiative, make-the-world-a-better place would also make a great company in general. But this statement makes it sound like attracting and retaining talented women or family-focused men is an after-thought instead of the massive benefit that it is.

  2. David Jones says:

    Amber, I entirely see your point, but let me convey my sentiment I believe to be fact. Also, the article is somewhat misleading (unintentionally) due to lack of space. But the reason to both is this: CorpAmerica (the global collection) still does NOT get it. The referenced ‘already Well Run’ companies who have the programs in place CONTINUE to be great because of the CULTURE that resulted in the ‘perks’. The rest of CorpAmerica who doesn’t ‘get it’, thinks that by merely placing the ‘perks’ in place, the converse (or is it inverse? 🙂 ) will occur – it does not. NO MATTER WHAT, if the organization has no CULTURE of TRULY ‘caring’ about the employee or their family and implement merely to attract and be perceived as a ‘family’ company, then the employees pick it up and never truly care about the company.

    So even though it may seem like chicken and egg syndrome – it’s not; it’s more like: Well he loves me so I ‘must’ love him in return – and that never works. Neither does merely placating women, men or families with ‘family friendly’ crap if they don’t mean it.

    I wrote a blog of a box store executive – http://captivecoaching.wordpress.com/

  3. In reading the abstract of the article, “This association [positive correlation between firm productivity and FFWP] disappears, however, once we control for a measure of the quality of management practices.”

    So, maybe a hasty conclusion, but wouldn’t the next logical step be to conduct a study wherein FFWP is treated as a management practice? One could do a factor analysis of management practices to see those management practices that yielded the most “bang for their buck.”

    ~~~

    I’m still a proponent of FFWP and would be interested to see a study of the country with the most FFWP all on their own. I know Canada is pretty forward-thinking in that they have 15 weeks of paid maternity leave, followed by a combination of 35 weeks (either the father or the mother) of paid leave. If one’s curious, there’s a good collection of “parental leave” on Wikipedia.

    With Love and Gratitude,

    Jeremiah

  4. Brian says:

    15 weeks paid maternity leave? 35 weeks leave for mother or father in Canada. Lucky stiffs. I would love to see this concept brought to the US and increased. Maybe a good 90 days paid leave for fathers so they can really bond with the new born. I don’t understand why corporate America doesn’t get that the more they give the worker the more they receive back in kind. Except those poor single schmucks but what are you going to do? They could choose to have a family if they wanted.

  5. Andrew Munro says:

    I am interested to see that the study focused solely on manufacturing firms “mainly to avoid problems in measuring firm performance”. Without wishing to stereotype, I suspect that the results might be different for knowledge-intensive services firms where individual contribution is not so easily commoditised and replaced/covered. In those scenarios, having FFWP might be revealed to be a more clearly advantageous strategy, especially over the mid to long term.

  6. John Serpa says:

    Interesting study. Brings to mind a highly successful company I researched recently, SAS, a FFWP firm based in Durham, NC. They top the charts in the Forbes Best Company To Work For poll year after year, not to mention 34 consecutive years of revenue growth.

    So—is it a chicken and egg concept? I think not. Our human brain does not function very well after 8-9 hours of continuous use, hence, FFWP focused firms’ get this and by allowing people to embrace a healthy life-family-work balance, productivity climbs naturally. We were designed to work, but we are also designed to be in community.

    I am often suspect of studies that merely examine metrics at a superficial level and don’t delve into the “organics” of the organization such as turn-over, employee engagement, synergy, loyalty, and how the participants within that FFWP truly “feel”.

    Might be a bit touchy-feely, but SAS is a prime example of the boomerang effect, how what goes around does come around.

    John Serpa
    Vienna, VA

  7. Brahm Memone says:

    I would tend to agree. having worked on three continents and lead large teams, this sounds real.

  8. Interesting study, thanks for sharing, Dan!

  9. Ben Knight says:

    I get one month of paternity at my current job that I plan to use soon, the duty station I mainly work in is hosted in the USA. Some people think this place is not forward thinking. It has had this policy for quite sometime.

  10. Chris Santos says:

    FFWP creates less stress for parents who constantly have to think about their kids – for singles this isn’t the case, and yes, having kids is a choice (I’ll take that argument off the table). However, many people do make that choice and the stress it adds impacts performance, in many cases immeasurably. Working for an organization that understands this makes life easier. The US is dead last in maternity and paternity leave/care among industrialized countries. Why? Healthier (mental and physical) make more productive workers. Yet, we have an obesity problem. The US isn’t as progressive as some would claim.

  11. Curt Rice says:

    And having a higher proportion of women in leadership reportedly correlates with increased profitability. So, if women are also more likely to implement FF policies, that makes it pretty clear what one should look for in one’s next employer! Related discussion at: Why hire (wo)men?: http://t.co/0s8bdbF

  12. Alex says:

    I think with more and more unique family living situations a family friendly workplace is a trend that simply needs to grow in order to cater to the masses looking for employment.